Pfizer's announcement that preliminary data showed that its Covid-19 vaccine candidate was more than 90% effective sparked a massive Wall Street rally on Monday, with investors rotating into some of the stocks hardest hit by the pandemic. The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite hit intraday record highs during the session.
— Gina Francolla, Jesse Pound
The Dow and S&P 500 held on to much of their gains on Monday afternoon but did close off of session highs. The Dow rose 835 points, or nearly 3%, while the S&P 500 rose 1.2%. Both hit intraday record highs earlier in the session before slipping.
The Nasdaq Composite, which has outperformed the other major indexes this year, fell 1.5%.
— Jesse Pound
Berkshire Hathaway's Class A stock rallied more than 6% after the company reported a record buyback for the previous quarter on Saturday.
Warren Buffett's conglomerate bought back $9 billion worth of its own stock during the third quarter.
Buffett's repurchase spree comes amid a tough time for its operations as the global economy struggles to recover from the coronavirus, directly impacting the company's wholly owned businesses which include railroads, utilities and insurance.
—Fred Imbert
The Dow and S&P 500 were on pace to post record closing highs as the positive vaccine trial from BioNTech and Pfizer lifted market sentiment. The Dow traded more than 1,200 points higher, or 4.5%. The S&P 500 gained 2.8%. The Nasdaq Composite lagged, rising just 0.2% as traders sold names that benefited from people staying at home during the pandemic.
—Fred Imbert
Stanley Druckenmiller, CEO of the Duquesne Family Office, said he wouldn't bet against the U.S. stock market right now given the massive rotation out of growth and into value names that's currently taking place.
"You've had a bunch of equities benefitting greatly from work from home," Druckenmiller said. "A lot of money has rotated into them. They are overvalued."
"But then you've got a whole other sector of the market that has struggled mightily because of Covid," he added. "They're selling at under-value relative to, say, a three-to-five-year outlook. So the rotation into that would seem entirely rational."
—Fred Imbert
The price of oil rose more than 8.5% on Monday for its best one day advance in six months amid optimism around a coronavirus vaccine. U.S. West Texas Intermediate crude settled up $3.15, or 8.5%, to $40.29 and the European benchmark brent crude was up $3.11, or 7.9%, at $42.56 a barrel.
Oil prices plummeted during the pandemic as demand for oil evaporated during the economic shutdown; however, a vaccine could spur more demand as the economy returns to normal. Meanwhile, Saudi Arabia said an OPEC+ oil output deal could be adjusted to balance the market.
— Maggie Fitzgerald
Shares of Beyond Meat moved sharply higher and briefly turned positive after the company said that it would be a supplier for McDonald's' new "McPlant" lineup. McDonald's announced the new offering earlier on Monday morning but did not say that Beyond was involved.
"Beyond Meat and McDonalds co-created the plant-based patty which will be available as part of their McPlant platform," the alternative meat company said in a statement.
Beyond Meat reports quarterly earnings after the bell. The stock last traded down 0.8%.
— Jesse Pound, Amelia Lucas
Fundstrat's Tom Lee said Monday that this rally in the market was just a "baby step" and that the S&P 500 could rise another 10% before the end of the year.
"There's another playbook that people have that they stuck in their drawer on investing which is once we get through Covid and we can see the beginning of the end through a vaccine or therapeutic, there is a really strong cyclical recovery that will take root," Lee said on CNBC's "Halftime Report."
CNBC Pro subscribers can watch the full interview here.
— Jesse Pound
—Fred Imbert
The market rally was holding steady as the session approached its halfway point. The Dow Jones Industrial Average was up 1,200 points, or 4.2%. The S&P 500's jump was at 2.9%. The Nasdaq was still lagging but had gained 0.8%.
— Jesse Pound
The yield on the 10-year Treasury note last traded up 13 basis points at 0.95%. The benchmark rate earlier touched a high of 0.975%, its highest level since March 20. The yield on the 2-year Treasury bond hit a high of 0.189%, its highest level since June 25.
Bank stocks jumped amid the climb in bond yields. Shares of JPMorgan and Citigroup both surged about 10%. The SPDR S&P Regional Banking ETF is up over 14% Monday, on pace for its best day since Oct. 13, 2008 when the ETF gained 15.46%.
— Yun Li, Gina Francolla
Shares of alternative meat company Beyond Meat lost 8% on Monday morning after McDonald's announced that it would test its own meat-free burger in 2021 as part of its new "McPlant" menu offering. Beyond Meat had provided the meat-free patties for a McDonald's test run in Canada.
— Jesse Pound, Amelia Lucas
Energy stocks moved sharply higher along with oil prices on Monday morning following the news from Pfizer. Shares of Valero, National Oilwell Varco and HollyFrontier were all up more than 20%. The Energy Select Sector SPDR Fund jumped more than 12%.
— Jesse Pound
The S&P 500, mid-cap S&P 400, Dow Industrials and Dow Transports all hits new intraday record highs in morning trading on Monday. The small-cap Russell 2000 jumped more than 5% to its highest level since September 2018, closing in on its intraday all time high of 1,742.09 from Aug. 31, 2018
— Gina Francolla
Stocks rocketed higher at Monday's open, led by cyclical names most reliant on a successful vaccine. The Dow Jones Industrial Average surged 1,600 points to 29,925.96, surpassing its previous intraday record of 29,568.57 from Feb. 12. The S&P 500 surged 3.7% out of the gate. The Nasdaq Composite rose just 1.3% as investors rotated out of some of the high-flying tech and stay-at-home plays.
— Yun Li
The benchmark 10-year Treasury yield climbed 10 basis points to 0.92% on Monday, its highest level since Wednesday. The 30-year yield jumped 12 basis points to 1.71%. Yields move inversely to prices. The positive vaccine news drove investors out of safe bonds and into risk assets.
"As stock markets rally around the world on the news, bond markets will sell off, driving yields higher and that will cause a repricing across all asset classes," Chris Zaccarelli, chief investment officer at Independent Advisor Alliance, said in a note.
— Yun Li
Oil prices jumped on Monday morning as positive vaccine news from Pfizer increased optimism about the economic recovery and Saudi Arabia said an OPEC+ deal could be adjusted. Futures for U.S. benchmark West Texas Intermediate popped 8.8% to break above $40 per barrel. European benchmark Brent crude also climbed nearly 9%.
— Jesse Pound
Futures contracts for the Russell 2000 went "limit up" on Monday morning, rising 7%. Below is a brief explanation of what that means:
U.S. stock futures are immediately halted if they hit an upside or downside limit of 7% in non-U.S. trading hours, that is before 9:30 a.m. ET. In effect, these contracts get "pinned" at the 7% limit by the CME Group and are unable to trade above or below the upper or lower bound, respectively, to ensure that opening trade is orderly and not emotional.
CME Group has also recently implemented a "dynamic circuit breaker" for stock futures contracts which halt trading on these instruments if they move up, or down, 3.5% in one hour. In these scenarios, futures are halted for 2 minutes.
—Fred Imbert, Tom Franck
U.S. stock futures jumped in a knee-jerk reaction to the news that the vaccine developed by Pfizer and BioNTech is more than 90% effective in preventing Covid-19. Dow futures last traded up 1,746 points, or 6.2%, while S&P 500 futures gained 4.5%.
— Yun Li, Nate Rattner
Futures contracts tied to the Russell 2000 rallied as investors bet small-cap stocks would greatly benefit from a coronavirus vaccine as it would help the U.S. economy reopen at a faster pace.
Russell 2000 futures were up 7% to 1,758.10, reaching an upside limit set by the CME Group to prevent overly volatile trading moves. Small-cap stocks have struggled in 2020 as investors have flocked into high-flying names the did well as more people stayed at home. The Russell 2000 index is down 1.5% year to date, while the large-cap S&P 500 has gained more than 8%.
—Fred Imbert